Market Entry Strategy

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Anna’s Car is one of the top automakers in the United States that is currently planning on selling its new revolutionized Smart Cars to two foreign countries, Japan and Germany. The company believes that the increasing trend of going green and concerns about the environment in Japan and Germany will merge significant profits shortly after entering those two markets. Anna’s Car has evaluated various market entry strategy alternatives and is now hesitating between direct exporting or foreign direct investment for Germany and franchising or joint venture for Japan.
Direct Export The main advantage of direct exporting for Anna’s Car is going to be fact that the company will be able to produce Smart Cars in the United States
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That way there will be less chance of failure in case something goes wrong as Anna’s Car would be buying an established business that has been very successful. Statistics show that “franchises stand a much better chance of success than people who start independent businesses; independent businesses stand a 70 to 80 percent chance of NOT surviving the first few critical years while franchisees have an 80 percent chance of surviving” (Coltman, 2009). Also, Anna’s Car would receive a lot of help with starting the business and running it afterwards which would be necessary as the company will be performing operations in a foreign country that has different rules, culture as well as language. Anna’s Car would get all the equipment, supplies and instruction or training needed to start the business. If the negotiations go well, the company would be also able to receive ongoing training or help with management and marketing (for instance, parent company’s national marketing campaigns). Supplies and inventory will cost less than if Anna’s Car was running an independent company. The research shows that “franchising in Japan has shown a steady growth: the franchising system has been recognized by the Japanese society as a tool of innovation and development for the economy of the country” (Info Franchise, 2007). Starting franchising in Japan may be quite easy as the franchising system is not as regulated – there

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